Johnson Matthey (LON: JMAT) share price has dropped to its lowest level in the last seven months. The stock has plummeted 14.73% since the start of 2023. The latest analysis reveals that a bounce may be around the corner due to a retest of a major demand zone.
On Thursday, most of the UK shares showed a negative price action as the benchmark FTSE 100 index fell by 68 points. Johnson Matthey shares tanked 2.31% as the latest earnings report disappointed the investors. At press time, the shares were trading at 1818p.
According to the latest earnings report, the adjusted pretax profit before interest came 3% above Jefferies expectations for the second half. The figure was also 5% above the consensus forecasts. However, the expected guidance for adjusted EBIT came 8% below analyst expectations for 2023-2024.
The Johnson Matthey share price dropped 2.42% on the announcement of the result. This also marked a second consecutive red day for the stock and also the fourth losing week in a row. The shares are currently trading 23.8% below their yearly highs.
The following LON: JMAT chart shows that the price has been consolidating within the 1800p-2400p price range for almost a year. The bottom of this range has been acting as a support zone. This support has resulted in multiple bounces in the last 12 months.
The recent sell-off has resulted in another retest of this key support area. Although the Johnson Matthey share price forecast is still not looking bullish, I still expect at least a relief bounce from the 1760p-1800p level in the coming days.
I’ll keep posting my updated Johnson Matthey analysis in my free Telegram group, which you are welcome to join.
This post was last modified on May 25, 2023, 15:40 BST 15:40